Finsbury Food Group, a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, has reported the strong trading performance for the six months to 27 December 2014. Total company sales revenues grew to £107.6m, an increase of 24% on prior year. This represents organic growth of just over £4.9m, an increase of 5.6% versus prior year.
The Fletchers acquisition completed at the end of October contributed £16m of additional sales revenue. Consequently the UK bakery division grew by 27.7% inclusive of Fletchers, with an especially strong seasonal performance from cake. The overseas division, the company’s 50% owned joint export business, also finished the first half strongly, resulting in flat sales versus the prior year and reversing the 3.1% decline reported for the first four months.
The strong sales growth and continued momentum was helped by new products such as Disney Frozen cakes, popular Christmas seasonal ranges and increased promotional activity. As previously stated, consumer markets remain challenging and the board anticipates that the Fletchers acquisition will drive the Group’s second half growth.
Improvements in operating efficiencies resulting from the ongoing capital investment programme, and overhead reductions completed during the second half of last year complemented the stronger first half organic growth. These combined volume and efficiency benefits helped offset labour and general cost inflation pressures, which have moderated compared to recent years, delivering improved operating margins.
The Fetchers business is now being integrated into the broader Finsbury Group and the board remains confident that the planned scale and efficiency benefits will be delivered as expected.
The board believes the larger, more diversified speciality bakery group is a strong multi-channel business, well equipped to deliver growth and improved shareholder value over the coming years.
John Duffy, chief executive of Finsbury Food Group, said: “The Fletchers acquisition, while still in early stages of Group integration, has shown very positive signs of growth and progress. In addition, our capital investment programme continues and has laid the foundation for the Group’s positioning in a market experiencing industry-wide pressures. These factors, along with the benefits of being a larger, more diversified specialty bakery group underpin our belief that the Group is in a strong position for the year ahead.”